The Wainhouse Research Bulletin

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Andrew W. Davis, [email protected].

Welcome to 2001 and Volume 2 pay a purchase price of $7 million in cash and 1 million Genesis shares, which are trading for about Happy New Year Everyone. This is issue #1 of $42.50/share as this newsletter is being written – so volume 2 of the Wainhouse Research Bulletin! The the purchase price is about $50 million. team here is looking forward to reporting to you all While PlaceWare, Evoke, and WebEx are more well the multimedia conferencing and collaboration news known in the web conferencing arena, Astound has and views in the coming year. Since we began our been quietly building a solid product/service in the newsletter on July 24, 2000, we’ve published 23 market, and has closed several service provider issues and we’re very pleased with the feedback accounts, including Vialog and Genesys. Several we’ve been getting and with the rising tide of months ago, when Genesys selected Astound it also subscribers. Please encourage your colleagues to invested about $5 million in the Canadian company. sign up for their own subscriptions. Despite the message in the header above, we are averaging about Here’s What I Think two phone calls per week asking us how much the subscription costs (it’s free!) and three emails a This acquisition positions Genesys well to provide a week asking us how to sign up (go to comprehensive range of audio, video, and web wainhouse.com). It’s simple. And now… on with conferencing services to its customers and to control the news…….. its own technology and destiny. I believe the Astound technology is first rate, and the team there WRB Subscriber List has done a great job catering to some major 4000 customers. 3500

3000 I also believe the future of audio conferencing is

2500 web conferencing and if you look at the revenue

2000 models today, users are accustomed to paying per minute for audio calls, but generally think that web 1500 conferencing should be free, like this newsletter and 1000 1 2 3 4 5 6 7 8 9 1011121314151617181920212223 everything else on the Internet! So, I question the WRB Issue Number long-term viability of stand-alone web conferencing companies; most of them will have to run for cover, Genesys Conferencing Acquires Astound and the best strategic fit is with an audio conferencing company. With this deal, Astound Just when we thought it was safe to sit back with our instantly picks up a large worldwide sales force. eggnog and relax for the Christmas break, Genesys Nice move. announced the acquisition of Canada’s Astound. Astound has 82 employees and sales of just over $2 [email protected] million in its most recent fiscal year. Genesys will

The Wainhouse Research Bulletin Page-1 Vol. 2 #1, January 3, 2001 InView Jumps on IP Conferencing So, while SAVVIS is providing the network, InView will be providing the conferencing services. One For those of you who have been waiting for a important part of those services is the web-based conferencing service provider to jump on the IP reservation/management scheme, and for that, bandwagon, you should take a good look at InView. InView has selected Orchestra Software from InView is about to offer its customers a Collaborative Systems, a software developer who comprehensive IP solution for a variety of has done a lot of work for Bell South. According to conferencing services based on several services the the product claims, Orchestra allows users to company is about to roll out. schedule and control their audio and video conferences, regardless of the brand of hardware in Perhaps the most important building block in the the network. Orchestra handles scheduling, billing, InView arsenal is an agreement with SAVVIS in reporting, trouble ticketing, device control, and which InView will provide conferencing traffic management as well as automated H.320 and applications to customers on the SAVVIS network. H.323 call launching and will be bundled into the SAVVIS, a publicly traded company with a heritage overall InView suite of services. The “hardware- in ISP operations and managed data networking agnostic” claim by Collaborative Systems is a bit services, operates an IP-over-ATM network that hard to swallow, given today’s state of the market. reaches over 117 cities in 51 countries through 151 I’m not saying it isn’t true, I’m saying that recent POPs and 128 ATM and 147 frame relay switches. trends from FVC.COM, 1414c, and Polycom/ You can think of the SAVVIS network as a giant Accord would say the technology isn’t ready for cloud providing quality of service for customers “hardware-agnostic.” (subscribers) through a stable of POPs and private network access points (NAPs) where the SAVVIS The third element of the InView strategy is based on network connects to UUNET, Sprint, and incorporating VX-Centrex hardware from Ridgeway Cable&Wireless networks. Between SAVVIS and Systems. Ridgeway’s VX system is a brilliant the others, you can probably get to all your corporate product that suffers because it doesn’t fall cleanly colleagues and more than half of your inter- into any predefined product definition or category, company colleagues without touching the public and because it is an infrastructure or service provider Internet with IP voice/video traffic. product that has no enterprise counterpart. The VX is a multimedia applications platform + H.323 Without going into all the techno-babble about gatekeeper + switch + proxy server + NAT solution layers, switches, routers, and DS1 to OC12 for address management. The bottom line is that the bandwidth, suffice to say that SAVVIS is providing VX sits at the carrier site, not the enterprise site, and four quality levels or service agreement levels, provides the intelligence for managing, connecting, where latency guarantees range from 50 ms to 75 ms and manipulating H.323 media streams. Because it and packet losses range from less than 0.1% to 1%. sits at the carrier level, its functionality and services These latency figures are below the human detection are available only to subscribers. The good news is level, so that IP voice and video on the SAVVIS that subscribers don’t have to reconfigure their network should be as natural as circuit-switched networks or firewalls. All H.323 traffic passes voice and ISDN video. through well known Ridgeway ports.

I believe this is the way IP voice and video Concluding Thoughts conferencing is going to roll out – through a series of private IP clouds (Enron, Level 3, SAVVIS, InView is putting together the major elements Qwest and a host of others, including those required to migrate multimedia conferencing to mentioned above) and then ultimately through H.323 and ultimately to the corporate mainstream – peering points that connect these clouds. Someday, broadband networks with quality of service; web- but not anytime soon, quality of service will also be based management and control systems; and available on the Internet. infrastructure components for security, firewall compatibility, and reliable inter-enterprise (but same service provider) communications. These three

The Wainhouse Research Bulletin Page-2 Vol. 2 #1, January 3, 2001 announcements rolled up into one event are exciting customers and not be just another pretty press news indeed. The new service will be sold by about release. 200 sales people in SAVVIS, 15 in InView, and another 200 at InView’s sister company Intercall. V-SPAN's experience in the H.320 world and the company’s focus on delivering next-generation IP When you look at the developments spurred by services put V-SPAN in a great position for the IP FVC.COM + Qwest; Global Video Com + PSInet; future and for gateway services to legacy systems. WireOne + Exodus; V-SPAN, and 1414c, we should And having the Sony sales team/reseller network start to see some very reasonable clouds of IP promoting the V-SPAN service is nice. conferencing deployed in 2001. It’s now or never for the industry. Deals like this have to make you wonder if we’re heading for the cell phone model. Sign up for XX [email protected] (brooke ysteboe) months of service and get the hardware for free!

Sony partners with V-SPAN for IP Sony, meanwhile, has also announced a relationship Conferencing with Broadwing that is more centered on cooperative marketing, in this case Sony video- Sony has announced a partnership with V-SPAN to conferencing systems and Broadwing IP services. provide end-to-end videoconferencing solutions for customers of its set-top system, the Contact. [email protected] (Josh Cartagenova)

Contact supports both H.323 and H.320. The video V-SPAN Rolls Out IP Services and audio conferencing network services from V-SPAN will include bridging, network provision- Literally as we were going to press, we learned that ing, gateway connection, managed services, V-SPAN is about to announce two related new scheduling and reservations, and help desk for both services. OnNet IP Conferencing is a complete ISDN-based and IP-based equipment. Additional videoconferencing-over-IP service that includes V-SPAN services include web-based scheduling, bridging and gateway services for V-SPAN network consulting, and event management, as well customers. In conjunction with this announcement, as product training. These services will be marketed V-SPAN is enhancing its Meeting Center web portal and sold by Sony and its reseller network. to include self-managed IP conferencing with features such as enterprise directory services, event Here’s What I Think notifications, and on-demand or scheduled call- launching capabilities. If you’re a large enterprise, you probably have your own network and conferencing service provider if V-SPAN has partnered with several network you need one. But if you’re a small or medium providers, including cable and DSL companies, to enterprise (SME), dealing with the local RBOC or provide quality-of-service clouds for IP traffic. In CLEC for ISDN and IP services can be a daunting addition, these networks can touch the Internet for task. And video applications don’t always help. communications to anywhere, although without QoS Since Sony is targeting SME with its Contact set top guarantees. videoconferencing system, this deal makes some sense. End users get the warm fuzzy feeling of V-SPAN also announced the availability of having one person (V-SPAN in this case) to take comprehensive streaming services. Customer- care of all the nitty gritty implementation details and provided content can be streamed across LANs, to provide on-going services as well. Sony resellers Intranets, or the web as a live event or on-demand. get to sell one-stop solutions. If you look at V-SPAN today, the firm offers a wide My inside sources tell me that V-SPAN and SONY range of integrated ISDN and IP conferencing teams meet every week to keep this program on services – audio, video, web, as well as a neat tie in track; so the program should bring real value to real to streaming delivery of conferences and other content. The firm is clearly way out in front of the

The Wainhouse Research Bulletin Page-3 Vol. 2 #1, January 3, 2001 conferencing pack here, with a comprehensive a small number. Glowpoint does not yet allow you offering organized under a web portal. to call non-Glowpoint users over IP, you have to use the Glowpoint gateway to get off the network. And My Take the network does not yet connect to the Internet at all, so you need a separate connection for web It was just one month ago at the executive surfing or Internet-based conferencing. But roundtable at TeleCon that the lack of IP services Glowpoint, like the other IP developments described was discussed as one of the barriers to widescale IP above, represents the future of the conferencing deployment. And now in this issue we have both industry. InView and V-SPAN jumping into the fray. A welcome development indeed, and a harbinger of [email protected] (Kelly Harman) several other announcements we expect to report on in the coming months. I believe conferencing won’t Ezenia! To Acquire InfoWorkSpace take off without IP, and IP won’t take off without 1) QoS and 2) IP-based conferencing service providers. Just when you thought you might have heard the last It’s all starting to come together. This could be the from Ezenia!, the company announces a $21 million year!! acquisition (combination of cash and stock!) of InfoWorkSpace, a business unit of General Voice your IP conferencing view on the WR Forums Dynamics Electronics Systems. Under the terms of the agreement, Ezenia! will acquire the [email protected] (Mark Evans) InfoWorkSpace product line and employ the management team and core group of developers. Wire One Reality Check Developed by General Dynamics Electronic After chatting with Rich Reiss at TeleCon, we asked Systems, InfoWorkSpace is used by multiple to see a demo of the Glowpoint network off the corporate and government organizations, including show floor. So last week, we traveled to the Defense Department agencies and the Intelligence backwoods of Canton, MA where Wire One has a Community, to build and organize online demo facility. We’ve written a lot in this issue of communities. The product includes instant WRB about IP communications, and quite frankly messaging, virtual meeting rooms, and various we were impressed with what we saw on Glowpoint. collaboration functions such as whiteboarding, We did a series of PictureTel-to-PictureTel and screen sharing, and online polling. Polycom-to-Polycom calls (384 kbps) over an IP WAN, both point-to-point and multipoint; and we Here’s What I Think did one call through a gateway to a legacy ISDN site. The performance was pretty amazing – fast The acquisition cost: While Ezenia! has been connect times, low latency, few lost packets, and showing lots of red ink on its P&L statements, it did high video/audio quality. have $40 million in cash and securities in the last publicly available balance sheet (9/30/2000). As The Glowpoint network is comprised of dedicated this bulletin is being written, Ezenia stock is trading capacity on the Exodus IP backbone. This is in at $1.25, down from about $12 in Q1 of 2000. (The essence a closed system, also known as a private current market cap of the company is $15.53 cloud, where the user can expect high quality of million, less than its cash in the bank, and less than service and high reliability. Wire One has co- the purchase price of the acquisition.) So located is bridges and gateways in ten Exodus data presumably, the combination of cash and stock to centers to create points of presence which are then buy InfoWorkSpace would be weighted towards accessed by customers using T1, fractional T1, or more cash and less stock. DSL lines, depending on what is available in specific locations. Ezenia!’s strategy has been as difficult to understand as any Intelligence Community black project. Wire One’s Glowpoint is only about a month old Ezenia!, once the leader in video bridging systems, and connects somewhere around 50 endpoints today, has given up that market to Accord, Avaya, and

The Wainhouse Research Bulletin Page-4 Vol. 2 #1, January 3, 2001 RADVision. The company no longer sees its core school educators require MPEG-2 high quality video market in the videoconferencing or T.120 space. is that younger students are more easily distracted by For the past 15 months Ezenia! has been talking imperfections in the video. Adult students will about the coming age of web interactivity and has dismiss video imperfections and focus on content, been pursuing a product strategy to enable web sites while the younger students will focus on the glitches with real time voice interactivity. As the company and miss the content. says, this “adds life to the Internet;” I’m just not sure when or if it will generate revenues for Ezenia! Maine’s network will be deployed in over 40 stockholders. But time will tell. The product is due classrooms this year but will ultimately be extended out any day now. to all high schools, vocational centers, and selected libraries. Maine, with its rural population and roads The combination of InfoWorkSpace and the that are snow covered from nearly September 2 to Encounter (IP) product line does represent an July 4, is an ideal place for distance education. interesting hardware/software combination for real- time collaborative solutions. And as part of the deal, [email protected] (Melissa Malley) General Dynamics becomes a reseller of Ezenia! products into the government. So, I see three New Industry Resource Book Available possible outcomes here. A) I don’t get it, and Wainhouse Research has published “The 2001 Ezenia! is about to set the corporate real-time Multimedia Conferencing Industry Resource Book,” collaboration market on fire and reverse its recent our guide to the technologies and market trends driving financial fortunes. B) I do get it, and Ezenia! the industry. Aimed specifically at conferencing end management has been taking strategy lessons from users, this 220-page book also includes an overview of some kamikaze pilots. C) Ezenia! is about to be over 75 vendors and scores of products and services. fabulously successful in the spooky world of Price is $995; details available at www.wainhouse.com. military and defense intelligence, which means we just won’t know anything about their products, Andrew’s Top Picks for 2000 customers, or applications. Let’s hear your pick on the Ezenia! discussion on the WR Forums now. No top ten picks for me because ten is just an arbitrary number; no best products because if you [email protected] (Steve Basset) say best you have to say best for what and best for whom. Instead, here is a short list of the NEW year Distance Education in Maine 2000 products/services/events that impressed me the most in a positive direction. (I’m not going negative I ordinarily wouldn’t cover this type of story…. but. so early in the year!) Two and half years ago my wife and I were on the beach in Bermuda and started chatting to the couple In alphabetical order: next to us about motor scooters and Bermuda Rum. I asked the fellow what he did, and Richard Hinkley Brainshark: I know it’s not video, but a service asked me if I knew what ATM was. “Are you that lets you annotate your slides via telephone, and talking about the machines you take money out of, then store the synched file as streaming media than or the technology you pour money in to,” I replied. anyone can view at his own convenience seems to Well, turns out Richard was in charge of rolling out hit dead center on a major market need. a state-wide ATM network for distance education in Maine. I believe the project hit some serious pitfalls Genesys: A merger binge to gain scale, capabilities, over a year ago due to the failure of some three- and reach. Give the French credit for thinking big. letter company to deliver the goods. However, a The pending acquisition of Vialog will double the press release crossed my desk last week from the company, while the acquisition of Astound gives governor himself announcing a major distance Genesys leading-edge web conferencing capabilities learning deployment using ATM networking and and control of their own destiny. MPEG-2 videoconferencing systems (from PictureTel: 900 Series. Impressive for its FVC.COM by the way). One of the reasons grade outstanding audio and video, the PT900 Series also

The Wainhouse Research Bulletin Page-5 Vol. 2 #1, January 3, 2001 includes a raft of innovations from its ImageShare said “cute” and “videoconferencing” in the same peripheral to the People+Content user interface. The sentence? 900 Series also represents the penultimate PC- centric system, with its Pentium-Windows NT Wire One: Give this company credit for taking the foundation open to the user and with collaboration bull by the horns. After merging ViewTech with All functions built directly into the Windows interface Communications, Wire One departed along an for all software applications. The PT900 Series is entirely new business plan – bringing quality of doubly impressive because of the enormous burden service IP networks to corporations over DSL and it carries – the fate of PictureTel is riding on this T1 lines. The Glowpoint Network has yet to prove stunning product, but the competition from new-age itself, but the foundation has been laid, and Wire appliances will be fierce. And the competition isn’t One is well on the way to giving corporations what sitting still. they want – low cost, reliable videoconferencing network connections. Polycom: ViaVideo was the first USB camera with hardware compression we could get our hands on Zydacron: After years of talking about video and we have been continually impressed with its quality and high reliability, Zydacron’s comCenter performance, packaging, and price. The user exec takes a new direction – Intelligent Meeting interface is superb and while other companies like Systems. Zydacron has tightly integrated scanners, Sorenson and VCON are sporting their own USB faxes, printers, whiteboards etc. into their PC-centric products, we think ViaVideo will stand the test of group systems product line. Yes, comCenter does time and be one of the industry’s classic products. videoconferencing, but it also performs a host of other functions that most meetings really require. Polycom: the pending acquisition of Accord Networks has the potential to turn the industry in People & Places new directions, to provide customers with end-to- end Polycom products, and to change the Vsoft, Robin Wilson as VP Business Development competitive landscape permanently. A brilliant strategic move, but also one that could stretch Sony, Nick Twyman, Sony Entertainment Robots Polycom’s reserves. Europe (I’d like an AIBO to test out, please!) TANDBERG: the TANDBERG 6000, introduced Letters to the Editor at the very beginning of the year, was a truly breakthrough videoconferencing appliance with its Andrew: ability to accept inputs directly from a computer VGA port, dual stream support, 60 field encoding, From RADVision's perspective, the acquisition of and 4CIF still images. Buried under the hood was Accord by Polycom strenghtens our existing the fact that the 6000 was an entirely new hardware relationships with our current endpoint partners as architecture for TANDBERG, one designed to take well as our relationship with Cisco. As for "the them well into the next decade. During the year strengths of the Accord product line", our new ViaIP TANDBERG quietly (too quietly in our opinion) product line is far superior in many ways including a rolled this architecture down the product line, more advanced and scaleable architecture with much creating one of the most comprehensive more power. What Polycom gains from the videoconferencing system lineups in the industry. acquisition is a channel into service providers. (product breadth matched only by Polycom in our Michelle Blank, VP Galactic Marketing, RADVision opinion) Got a comment? Speak your mind on the TANDBERG: The TANDBERG 1000, introduced Polycom/Accord discussion on the WR Forums. at the end of the year, is a marvel in industrial design and is sure to turn heads in small conference rooms The Wainhouse Research Bulletin is published by Wainhouse Research and executive offices. When was the last time you LLC, 112 Sumner Road, Brookline, MA 02445. Tel 617-975-0297. Email to [email protected]. Free subscriptions are available at www.wainhouse.com. Copyright 2000 by Wainhouse Research.

The Wainhouse Research Bulletin Page-6 Vol. 2 #1, January 3, 2001 Index to WRB Volume 1 (2000) Accord ...... 2, 5, 9, 20, 21, 22, 23, Panasonic ...... 11, Accord$ ...... 5, 17, Peer Digital ...... 23, ACT...... 5, 10, 11, 23, PictureTel...... 1, 2, 8, 9, 10, 11, 15, 20, ACT$...... 19, PictureTel$...... 1, 2, 4, 15, 16, 20, AT&T...... 6, 22, PlaceWare ...... 1, 10, 15, Avaya ...... 2, 22, Polycom ...... 4, 9, 11, 21, 22, Avistar ...... 8, 20, Polycom$ ...... 1, 15, Bellsouth...... 19, Qpass...... 11, Brainshark ...... 22, Qwest ...... 9, British Telecom...... 21, 23, RADVision ...... 5, 8, 9, 17, 18, 19, 23, BT...... 15, RADVision$ ...... 4, 16, Cable & Wireless ...... 15, Real Networks...... 23, Centra$ ...... 15, Ridgeway ...... 23, Cisco...... 2, SBC...... 20, Computnetix...... 22, Scale Eight ...... 23, C-Phone$...... 15, 19, 20, SeeSaw...... 23, CUseeMe...... 6, 9, Sharp ...... 8, CUseeMe$...... 16, 20, Smart Technologies ...... 4, DataWeaver...... 10, Smith Micro ...... 2, Envoyglobal ...... 1, Sony ...... 21, 22, Evoke...... 10, Sorenson...... 9, Excalibur ...... 23, Spectel...... 17, 20, 22, Exodus...... 1, Sprint...... 8, eYak ...... 18, 22, StarBak...... 23, Ezenia!...... 1, 15, TANDBERG...... 1, 6, 14, 20, 21, 22, Ezenia!$...... 1, 6, 16, TANDBERG$...... 1, 14, France Telecom$...... 20, TeleStream...... 23, FVC.com ...... 10, 19, 20, 22, 23, TI...... 5, FVC.com$ ...... 2, 16, 17, VBrick...... 1, 16, Genesys ...... 6, 12, VCON ...... 4, 11, 20, Gentner ...... 11, 23, VCON$ ...... 6, Gentner$...... 5, 15, Vialog...... 2, 9, 10, 12, Global Crossing...... 2, 5, 10, Vialog$...... 19, Global VideoCom ...... 22, Videoconf Industry ...... 6, 19 IBEAM...... 19, ViewCast$...... 17, ImageCom ...... 8, Vingage...... 23, IMTC...... 6, Virage...... 11, Intel...... 9, VirtuaLINC...... 17, InternetConnect ...... 12, VNCI...... 17, InView...... 8 VNCI$...... 20, iVAST ...... 23, Voyant...... 1, 22, IVCi...... 5, VSI$...... 5, 19, Ivron ...... 10, Vsoft...... 10, Live365.com...... 23, VSPAN ...... 8, 22, 23, Lotus...... 11, VTEL ...... 1, 7, 8, 9, 10, 11, 17, 19, Lucent...... 15, VTEL$ ...... 4, 15, 20, Luxxon ...... 23, WebEx ...... 4, Madge$...... 15, WebEx$ ...... 16, Microsoft ...... 15, WireOne...... 1, 8, 12, 22, Minerva ...... 23, WireOne$...... 2, 6, 17, Motion Media ...... 15, WorldCom ...... 22, Motion Media$...... 4, Zydacron ...... 16, 17, 19, Netergy Networks ...... 9, Netergy Networks$ ...... 17, 20, All WRB back issues available in the bulletin archives at Octave...... 2, 10, 21, www.wainhouse.com PacketVideo ...... 23,

The Wainhouse Research Bulletin Page-7 Vol. 2 #1, January 3, 2001